I didn't know that was an option! Most of the ones I looked at wanted the full payment upfront before even starting. Do you have specific ones you'd recommend that let you pay just for the filing part? I've already filled out all my forms so I'm really just looking for the electronic submission part.

FreeTaxUSA is pretty good for this approach. You can complete your federal return for free, then it's just $15 for the state portion. Some others like TaxAct and TaxSlayer have similar options where the federal basic filing is free and you just pay for state. If you've literally already completed the physical forms with a pen, then using the IRS Free File Fillable Forms mentioned above is your best bet. You'll just need to transfer the information from your paper forms to the electronic versions. There's a bit of duplicate work, but it's free and gives you the e-file benefits.

Certified mail with return receipt is essential too. It's a few extra dollars at the post office but gives you proof of when they received it. I file on paper every year and always use certified mail after having a return "lost" in 2018.

You can still claim eligible education expenses even if they're not listed on the 1098-T! Just make sure you have receipts or statements from the university showing they were required fees for enrollment. I had to do this last year for some lab fees that weren't on my 1098-T.

Yikes, 4 months is a long wait! Is there any way to expedite the ITIN process? We're already in February and I'm worried about getting everything done before the filing deadline.

Unfortunately, there's no official expedite process for ITINs. However, you can use a Certified Acceptance Agent (CAA) instead of mailing in original documents, which can speed things up. Some CAAs can verify your documents on the spot and submit certified copies with your application. Also, you can still file on time even if the ITIN isn't processed yet. Just submit your return with the W-7 by the deadline, and you won't face late filing penalties. Your refund will be held until the ITIN is issued, but at least you'll be in compliance with the filing deadline.

Do you use any specific apps for tracking expenses? I've been just using my phone's camera for receipts but it's getting disorganized fast.

I personally use QuickBooks Self-Employed which automatically categorizes most expenses when connected to your bank account/credit card. It also has a receipt scanner in the app that can match receipts to transactions. There are also free options like Wave that work well for basic tracking. The important thing is having a system - any system - rather than trying to remember everything at tax time. Just make sure you're consistent with it and do a quick review weekly so things don't pile up.

I use 28% as my set-aside percentage and it's worked perfectly for the last three years. Also remember you'll need to make quarterly estimated payments if you expect to owe more than $1000 at tax time. The due dates are April 15, June 15, Sept 15, and Jan 15 of the following year.

How do you apply for this First Time Penalty Abatement? Is there a specific form or do you just call and ask? And does it actually work for amounts this large?

You don't need any special form - just call the IRS directly and specifically request "First Time Penalty Abatement" or "FTA." Make sure to call the number on your notice. The size of the penalty doesn't matter for FTA eligibility - it's based on your compliance history. To qualify, you generally need to have filed all required returns and paid (or arranged to pay) any tax due for the past 3 years, and you can't have had penalties in those years either. The IRS agent will check your history right on the call. In my case, they approved it immediately, but sometimes they might need to review further or ask you to submit a written request. Even for large penalties, the approval process is the same. Just be polite but direct about requesting it.

What about trying to negotiate the amount down? I've heard about "offers in compromise" where the IRS accepts less than the full amount.

Omg thank you for mentioning this! I didn't realize there was a difference between withdrawing contributions vs earnings from my Roth. Is there an easy way to tell which is which when I go to make a withdrawal? And yeah I'll definitely try for the payment plan route first!

Your Roth IRA provider should be able to tell you exactly how much of your account balance is from contributions versus earnings. Generally, withdrawals come from contributions first, so if you've contributed more than you're planning to withdraw, you should be able to take that amount out without tax consequences. For example, if you've put in $12,000 over the years and your account is now worth $14,000, you can withdraw up to $12,000 penalty-free. Just contact your provider before making any withdrawals to confirm the exact amount of your contributions. And definitely pursue that payment plan with the IRS - they offer reasonable terms, especially for first-time issues.

I amended returns for 2 years of unreported scholarship income about 3 years ago. The process wasn't as bad as I expected. I used Form 1040-X for federal and had to fill out amended state returns too. The IRS charged interest on the unpaid taxes (inevitable), but I qualified for First Time Penalty Abatement which saved me hundreds in failure-to-file penalties. I wrote a letter explaining that I genuinely didn't understand scholarships were taxable, and they were pretty reasonable. Set up a payment plan for $150/month and it's almost paid off now.